China Hopes To Avoid Similar Path That Led To Japan’s Lost Decades

Societe Generale SA (ADR) (OTCMKTS:SCGLY) (EPA:GLE) in a recent report noted that there can be no other ending to China’s massive credit misallocation than a painful  burst. The question is when will it start  unwinding  and  at  what  pace.  Given  the control  that  Beijing  has  over  the  economy  and  financial system, the answer lies more with the political willingness and/or policy (mis-)calculation, at least at the beginning of the  process.  Beijing’s  tough  stance  on  the  ongoing episode of  interbank  liquidity  tensions  shows  that  the willingness  is  finally  here,  although  the  aim  is  still  to engineer  a  gradual  burst.  Whether  or  not …